It has been awhile since my last post; during this hiatus our daughter and son-in-law presented us with our second grandchild, a healthy baby boy. During the latter part of her pregnancy, I was speaking with a friend who was waiting on the arrival of his first grandchild. When he asked me what it was like to be a grandfather, I told him it was nothing short of wonderful. He then said that being a grandfather would probably be more enjoyable than being a father because after having raised one set of children you then would know more about raising the following generation. I thought about it and replied that I didn’t think so.

Instead, I felt that being a grandparent was more enjoyable because after having raised one set of kids you now knew that you did not – and would not ever – really know how to raise kids. What actually makes it enjoyable is that by this point you were okay with knowing that you didn’t know how to raise them. You see, knowing that you don’t really know leaves you more open to enjoying their exploration of the world around them, and to experience vicariously the joy they have at learning something new. Now, that’s just my opinion, but I do see myself being more relaxed with my grandkids and more willing to let them address the world around them in their own way, and not as I (or some parenting book) think they should. So when my granddaughter says that she wants to put chocolate milk on her breakfast cereal, I’m okay with it, and yet it is something that I would not have ever permitted my own kids to do.

In a way that’s a lot like the way the best managers and leaders of people that I have experienced have dealt with their team members or employees. The best leaders have had the humility – and the wisdom – to know that they didn’t have all of the answers. Once they got over that hurdle they were more open to having those whom they led take the initiative and address the problems in the way that they thought made the best sense. In the management books I think they call it fostering employee innovation. Now, I don’t want you to think that I’d let my grandchildren run with scissors in their hands or tap dance in the shower. Both grandparents and good leaders know when to step in when significant danger is imminent, but the good ones are also willing to let those who are entrusted to them experiment, fail, adapt, and eventually succeed.

Why do organizations fail? Case studies exist that delve into extensive post mortems of great or long time organizations that ultimately fade away. When you look at the various reasons and circumstance they all seem to come down to two basic realities. The organization succumbed to either entropy or inertia. Now both of these terms are based in the study of physics, but both apply to the dynamics of organizations.

The concept of entropy comes from the study of thermodynamics, and can be distilled to the description of the process of degradation, or running down, or a trend to disorder. Have any of you been in an organization that suffered from entropy? In organizations where entropy is gaining root you often see the advent of short cuts, abandonment of processes, conflicting internal agendas, and the repetitive adoption of new managerial approaches. Some tell tale signs are neglect of the basic ways of doing business that were at the root of the organization’s original success, sloppiness in the preparation of internal work product, and meetings that have no real purpose,

The concept of inertia also comes from the study of classical physics. It is the tendency of a any physical object to resist change in its state of motion, including changes to its speed and direction. Many of us have heard the old saw that even if you’re on the right track you will get run over if all you do is just sit there. Have any of you been in an organization that suffered from inertia? An indicator of an organization suffering from inertia is when you hear the phrase “….we’ve always done it this way.” Some tell tale signs are a drop off in new product development, a lack of investment in enhancing employee skills, and dismissing customer complaints,

One – or sometimes both – of these concepts is at the root of the history of every failed organization. They are a cancer that can and will destroy it. Like cancer, the key to a successful cure is early detection. The dedicated leader is always on the lookout for the tell tale signs of their advent in the organization. The response will differ depending on the individual circumstance, and the cure will be simple or complex depending on how virulent the nature of the entropy and/or inertia that the organization exhibits. But, early diagnosis goes a long way to ensuring success treatment. Be vigilant. Never take past success for granted, nor view it as a predictor of certain survival

Value and cost – we often use these terms interchangeably – yet they are anything but…

I often said in the lectures I gave in an MBA program that B schools in the 80’s and 90’s created a generation of business people who ended up knowing the cost of everything but the value of nothing. To a certain extent, they are still here – unfortunately many are now in senior executive positions.

Just think about how your process of decision making changes when you assess actions not in terms of their cost, but rather in terms of their value. While cost is always viewed in the context of expense, value is often handled as a way to evaluate an investment.

Take this example:

If you’re in business and you view labor as a cost – expense – you tend to focus on ways it can be reduced, or the output derived increased while holding it constant. In this instance they are paid enough to keep them quitting. And often they end up working just enough to keep from being fired.

If, on the other hand, you view labor in terms of its value – an investment - you see employees for the potential they represent, and what you can do to enhance the return on that investment. In this instance they are better trained and motivated, and rewarded with the opportunity to grow professionally and earn more as they contribute more.

Now think about changing your point of view from cost to value when you make your purchases. When the electric bill comes do you think of it as a cost of living in your home, or do you think of it as representing the value given to you by having lights to read by, a refrigerator to keep your food fresh, air conditioning to keep you comfortable, or a computer to connect you with the world. When you think about how much pleasure and personal enrichment the electricity brings you, you may not want to look at the check you right to satisfy the bill as a cost, but rather as a representation of the value that it brought to your life. I make it a point to write on my checks “VR = 100x”. It stands for” Value Received Equals 100 Times the Amount.” Often when I think of how better my life is because of having the money to pay the bill I use a higher number in the equation.

The smartest business person I ever met was Ruth the florist. I met her when her florist shop had been open for only a short while. It was the occasion of the birth of our first child. Being a good husband I ordered flowers for my wife as soon as our child was born. The next day upon visiting her at the hospital I saw the flowers. Next to them however was another arrangement of FLOWERS that a friend of mine had sent. When I got home I called him to thank him for the gesture – and for upstaging me. Since he owned his own construction company, I remarked that it must be nice to be able to send flowers and charge them to your business. He then asked me how much I had spent for the flowers I sent. I told him and he replied that he spent the same amount. I had to find out who was his florist. It was my friend who introduced me to Ruth. So I switched my floral account to her establishment.

I regularly sent flowers in those days, and was regularly complemented on the quality. As I continued to use Ruth as my florist I watched as her business grew and grew. She always took the time to make sure that her customers got great value – and they rewarded her with intense loyalty, and ever-increasing sales. Eventually, I asked her for the secret of her success. She looked at me and asked, “Why do you send flowers?”

“To celebrate the good times, to say congratulations or I’m sorry, to commemorate special days, that sort of thing,” I replied.

She whacked me on the shoulder and said, “No, no, no. Basically you and everyone else send flowers to make other people happy. And you see, I’m in the business of making people happy making other people happy. For this they give me money.”

That was the best and most succinct business mission statement I have ever heard.

To me it says it all. Think about Ruth’s business model the next time you shop at the mall and cannot find a sales associate who can answer your questions. Think about it the next time you spend a half hour in a waiting room for a physician’s visit. Think about it the next time you find out about a new bank or credit card fee. Think about it the next time you watch the CEO of GM dodge answering questions about the recent recall. Once you do this, take action and demand that you be made happy when you spend your money. If we all did this what a difference it would make.

Cause and effect – have you thought about it? It’s a powerful phrase that actually has many different meanings depending on the context in which you hold it. For me however the correct phrase is not “cause and effect” but rather “cause or effect”. Allow me to share with you my thoughts on the matter.

So many times in life we are faced with circumstances that demand a decision to take action or to just let things be. If you believe in free will as I do, then you believe that you are given the choice of being either the cause or the effect. By that I mean, from time to time, we often face circumstances that challenge us at the core of what we are. It is at those critical points in our lives that we are actually overtly blessed with an opportunity to exercise the divine gift of free will. This does not mean that we do this on our own. Throughout our lives we have acquired knowledge, skills, abilities, and faith that have shaped our beings up until that decision point. As a result, we have all of these past life investments to draw upon.

When we reach that decision point we then have the freedom to make one additional choice. In these instances we have the ability to be either a “cause” or an “effect”. By that I mean that we can choose either to be at the effect of the circumstances we face in our lives, and allow ourselves to be defined by them, or we can choose instead to be at the cause of the success we have in our lives despite the circumstances in which we find ourselves. When we choose to be at the cause we open the door to allowing our lives to be enriched.